cru Investment Management launches Africa Invest Funds and the Africa Invest Capital Protected Plan (AICPP), which hopes to produce exceptional investment opportunities and transform the long-term future of some of Africa’s vulnerables.
The Africa Invest Fund (AIF) invests in Sub-Saharan Africa’s poorest countries and is available to high-net-wealth investors and institutional pension schemes. Minimum investment is 50,000. The Africa Invest Capital Protected Plan (AICPP) offers exposure to the AIF but with capital protection. It has a minimum investment of 4,000 and is suitable for ISAs.
The AIF and AICCP Funds offer exposure to investing in farmland, irrigation systems, machinery and materials to transform the food output, plus food processing and International food distribution, cru says. Profits will be shared with investors and the Local Malawi community, cru says. AICPP is capital Protected to return the initial investment after seven years via an AA or better rated loan note authorised by the FSA.
cru Investment Management considers that Africa is one of the most under-developed investment opportunities. Food prices are on an upward trend, sub-Saharan global farm land is being re-directed to produce bio fuels thus reducing supplies. Long-term population trends are leading to increased food demand for rapidly growing populations.
Jon Maguire, CEO of cru Investment Management, decided an economic investment solution was the way to solve African rural poverty as giving has had limited success. He established a pilot scheme in which cru invested 2million, seeking to establish whether commercial agriculture in sub-Saharan Africa could generate profit and whether investment could establish a sustainable solution to reducing poverty.
Malawi, a former British protectorate and one of the 12 poorest countries in the world, was chosen for the pilot. It has a population of 13.6 million and the average income is 57 per annum.
The strategy of cru is to focus on the value chain to increase Return On Capital (ROC). Malawi current agricultural policy incorrectly focuses on production aggregation, not land aggregation, and land aggregation allows for cap-ex into irrigation, technical expertise, machinery. The Current share of the value chain that reaches the farm gate in Malawi is very low (just 1% of retail consumer price in some cases e.g. corn on the cob, herbs). Political pressure and consumer pressure is required to increase the share of the value chain at the farm gate, cru says.